Seminar (Dept. of Accounting)

Theme：Individual Investor Information Processing and Stock Price Informativeness: Evidence from a Quasi-Natural Experiment

Speaker：Yongxin Xu, Senior Lecturer, Monash University

Time：2022-05-25 14:00

Address：Online Meeting

Language：Chinese/English

ABSTRACT:

After staggered mandatory interactions between listed firms and individual investors, which only allow listed firms to explain existing information, exogenously enhance individual investors’ information processing, our difference-in-differences analysis shows that stock price informativeness measured by idiosyncratic volatility declines significantly, suggesting that better information processing for individual investors reduces stock price informativeness. Our results are robust to different proxies for stock price informativeness. Moreover, information production by individual investors decreases as they make fewer discussions via online investing forums afterward. Last, the decline in price informativeness is not likely driven by unobservable omitted factors or the reduced noise in stock prices.

SHORT BIOGRAPHY:

Dr. Yongxin Xu is a Senior Lecturer at Monash University. Before joining Monash, he worked at Cheung Kong Graduate School of Business, Tsinghua University, Southwestern University of Finance and Economics in China, and Victoria University of Wellington in New Zealand. He got his bachelor and PhD degrees in Accounting from Tsinghua University. His papers have been published in Journal of Financial Economics, Review of Financial Studies, Journal of Banking and Finance, and Journal of Management Accounting Research.